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Posts tagged ‘Job Growth’

Despite its sputtering economy – or perhaps because of it – China’s labor market may be able to provide more jobs for laid off workers than many think.

The working age population is shrinking by several million each year and the number of workers willing to migrate beyond their home province is falling, leaving jobs available for those willing to travel.

This suggests concerns about mass unemployment as China cuts down its industrial capacity and the risk that this could lead to social unrest may be overdone.

Take Li Xi, 34, for instance.After losing his job of 15 years at Highsee Iron and Steel in the slow-growing northern province of Shanxi, Li was not out of work for long.

Encouraged by friends to join them at an electronics factory 1,000 km (620 miles) to the south, he made the journey to Suzhou near Shanghai. The rest was easy.”On the first day I did a health check, and on the second day I was working,” Li said.

China’s economic growth slowed to a 25-year-low in 2015 of less than 7 percent and Beijing has flagged layoffs as it reduces massive surplus industrial capacity and gears the economy more to services and consumption.

Sources said in March that China was expecting to lay off 5-6 million state workers in the next two to three years as it curbs production capacity and pollution in rust-belt provinces.

While there is scant official data to build an accurate picture of Chinese unemployment, Chang Chun Hua, China economist at Nomura, said the jobs market can handle the unemployment pressures for now.

The working age population has been shrinking since 2012. Last year, the number of people between the ages of 16 and 59 shrank by 4.87 million, government statistics show. In 2014, the age group contracted by 3.71 million.

At the same time, the government says a higher-than-expected 5.77 million jobs were created between January and May this year.

“In general, the current unemployment pressure is still manageable for the Chinese government,” Hua said.

Domino’s Pizza Inc. will add 150 new stores in India every year for the next two to three years, chief executive Patrick Doyle said, as the fast-food chain aims to expand its footprint in the South Asian nation that is already its largest market outside the U.S.

“We believe India is going to continue to be a terrific growth market for us,” Mr. Doyle said in an interview ahead of the opening of Domino’s 1,000th store in India on Friday. “I remain incredibly bullish on the Indian economy.”

India has been one of the bright spots in Domino’s portfolio, while most other big American fast-food chains derive their growth from China. Rival Yum! Brands Inc., which owns Pizza Hut and KFC, makes nearly half its revenue in China, for example.

Even so, Domino’s stores in India account for only 5% of the company’s sales; its outlets in the U.S. account for nearly half.

Mr. Doyle said Domino’s success in India was down to the power of localization and longevity.

The company entered India 20 years ago — among the first foreign fast-food chains do so — and has since topped its pizzas with local flavors from paneer or Indian cottage cheese, to tandoori chicken.

It also customizes its menu for different regions of the country. In 2014, for example, Domino’s rolled out a spicy banana pizza for consumers in southern India. Last year, it began delivering pizzas to passengers on India’s vast state-run railway network.

In China, Domino’s had blamed its struggles in part on the fact that cheese and bread aren’t staples of the traditional Chinese diet. It signed a new partner in China a few years ago in an attempt to fight competition from brands like Pizza Hut, which serves a selection of other Western fare, including ribs, spaghetti and steak in its casual dine-in restaurants.

As slowing growth fuels labor unrest in the world’s second-largest economy, China’s top leadership is pushing for greater efforts to foster harmony across its increasingly agitated workforce. As the WSJ’s Chun Han Wong reports;

In a recent directive, top Communist Party and government officials called on party cadres and bureaucrats across the country to “make the construction of harmonious labor relations an urgent task,” to ensure “healthy economic development” and to consolidate the party’s “governing status.”

The policy paper was issued late last month and has circulated widely among Chinese labor scholars, lawyers and activists, who say it signals Beijing’s growing concern that festering labor tensions could soon threaten social stability or even weaken the party’s grip on power.

With China “currently in a period of economic and social transition,” labor relations have become “increasingly pluralistic, labor tensions have entered a period of increased prominence and frequency, and the incidence of labor disputes remains high,” the paper said, according to a copy reviewed by The Wall Street Journal. It cited problems including unpaid wages to China’s legions of migrant workers, growing protests and other issues.

Labor scholars say the paper—titled “the Communist Party Central Committee and the State Council’s opinion on the construction of harmonious labor relations”—marks a rare move by Beijing to formally outline policy priorities for tackling worker unrest. It also comes after Premier Li Keqiang pledged in early March, during an annual policy speech, to curb unpaid wages for migrant workers.

“The government is acknowledging the reality of rising worker unrest and wants to make this a bigger priority,” said Wang Jiangsong, a professor at the China Institute of Industrial Relations in Beijing. “But it also lacks specifics on implementation—it remains to be seen how this would work on the ground.”

China’s state-controlled trade unions are seeking to allay such concerns. They are pledging to keep promoting collective bargaining in a way that calms labor tensions without derailing growth in the country’s already-slowing economy.

“Collective wage bargaining is something we will continue to promote,” said Li Shouzhen, a senior official at the All-China Federation of Trade Unions, or ACFTU. “It is a tried-and-tested process that’s practiced by successful enterprises.”

(Reuters) – China has raised the wages of government workers by at least 31 percent, according to a document seen by Reuters on Tuesday, as part of efforts to combat corruption and lift the spending power of millions as the country seeks to increase consumption.

The basic salaries of some civil servants would be almost tripled, according to the document distributed to China’s cabinet and dated Jan. 12. It said the increases would be effective from Oct. 1, 2014.

The change is part of a broad effort by Beijing to reform the compensation levels of government workers to improve efficiency, reduce graft and hold officials more accountable for their own performance.

Executives at some Chinese state-owned companies, notorious for their inefficiency, suffered pay cuts this month.

“The pay hike indicates Beijing’s goal of improving the quality of life for the average Chinese,” Nomura economists said in a note. They said it was the first wage rise in eight years for central government workers.